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Business Start-Up Issues

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Business Start-Up Issues

Over the past decade, there has been an increased enthusiasm by motivated entrepreneurs,

leading to start-ups exploding everywhere. In 2020 alone, despite the challenging economic

times caused by the COVID-19 pandemic, the United States had over 800,000 start-ups.

(Kuckertz et al., 2020). This increased prevalence has been linked to the thriving culture of

technology and innovation, enabling small businesses to challenge the overarching domination

pedigree of established enterprises. However, only a few of these businesses grow to

significantly establish themselves and influence the economy, while most crumble after a few

years of operation. According to Kalyanasundaram (2018), 21.5% of these enterprises fail in the

first year, 30% in the second, 50% in the fifth, and 70% in the tenth. This high failure rate is

attributed to fierce competition, poor planning and management, and improper marketing

strategies, which constitute the major business start-up issues.

Primarily, fierce competition in the corporate world is an inevitable challenge that start-

ups have to face. This issue emanates from monopolistic businesses predominant in the market

and other emerging enterprises, each aiming to gain a competitive advantage and acquire the

largest market share (Radianto & Santoso, 2017). With such a competitive environment from

both online and traditional businesses, entrepreneurs must be aggressive and avoid pitfalls like

copying competitors’ strategies or choosing obscure niches to avoid competition (Radianto &

Santoso, 2017). This is why start-ups must research and analyze their industry beforehand and

ensure uniqueness in approach and operations to avoid being consumed by competition.

Additionally, most start-ups are challenged because of poor planning and management.

Arguably, most of the issues faced by emerging enterprises can be alleviated by having a proper

business plan and a dedicated management team (Kalyanasundaram, 2018). This ensures that all
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finances, pitfalls, and challenges are factored in, making it easy to be creative and flexible if

circumstances change. Moreover, it ensures that start-ups remain realistic in their expectations

and decision-making, which facilitates their alignment with their mission and vision statements

for quality delivery (Radianto & Santoso, 2017). Without such a perspective in planning and

management, such businesses are doomed to fail

Furthermore, start-ups are derailed by the lack of a proper way to market their products.

In most cases, these new enterprises rush into commercial advertisements without adequate

knowledge of their target market and other crucial market data (Kalyanasundaram, 2018).

Additionally, they are vulnerable to the pressure to maximize returns through result-oriented

marketing to avoid a steep plunge in profits (Kalyanasundaram, 2018). This can only be achieved

by having a strategy that gains the firm a loyal and satisfied customer base that ensures it

progresses and scales towards excellence.

From the preceding, it is evident that despite the upward spiral in start-ups, their success

is derailed by particular business issues. These concerns range from fierce competition to

improper marketing strategies and poor planning and management. This is why entrepreneurs

need to adequately plan for these factors to ensure their businesses succeed and challenge

established firms in the ever-expanding business world.

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References

Kalyanasundaram, G. (2018). Why do start-ups fail? A case study based empirical analysis in

Bangalore. Asian Journal of Innovation and Policy, 7 (1), 79–102.

https://doi.org/10.7545/AJIP.2018.7.1.079

Kuckertz, A., Brändle, L., Gaudig, A., Hinderer, S., Reyes, C., Prochotta, A., Steinbrink, K., &

Berger, E. (2020). Startups in times of crisis – A rapid response to the COVID-19

pandemic. Journal of Business Venturing Insights, 13(1), 100-169.

https://doi.org/10.1016/j.jbvi.2020.e00169

Radianto, W., & Santoso, E. (2017). Start-up business: Process and challenges in

entrepreneurship education. Mediterranean Journal of Social Sciences, 8(4), 97-110.

https://doi.org/10.1515/mjss-2017-0009